The Corporate Sustainability Reporting Directive (CSRD) is a transformative piece of legislation that is redefining how businesses approach sustainability. With its expanded scope and stricter requirements, the CSRD is not […]

Les Directive concernant les rapports sur le développement durable des entreprises (CSRD) is a transformative piece of legislation that is redefining how businesses approach sustainability. With its expanded scope and stricter requirements, the CSRD is not just a regulatory obligation—it’s an opportunity for businesses to demonstrate leadership, build trust, and drive long-term value.

This guide offers a detailed, step-by-step checklist to help your business navigate CSRD compliance effectively. From understanding the directive to implementing robust reporting practices, we’ll cover everything you need to know to ensure your business is ready for the CSRD era.

Understanding the CSRD

Les CSRD, which replaces the Directive sur la publication d'informations non financières (NFRD), introduces significant changes to corporate sustainability reporting. It aims to enhance transparency, comparability, and accountability by requiring companies to disclose detailed information about their environmental, social, and governance (ESG) performance.

Key Features of the CSRD:

• Champ d'application élargi: The CSRD applies to a broader range of companies, including large companies, listed SMEs, and non-EU companies with significant EU operations.

• Double matérialité: Companies must report on both how their operations impact sustainability and how sustainability issues impact their business.

• Standardized Reporting: The Normes européennes d'information sur le développement durable (ESRS) provide a detailed framework for reporting.

• Mandatory Assurance: Sustainability reports must be independently verified by a third party.

Why CSRD Compliance Matters:

Compliance with the CSRD is not just about avoiding penalties—it’s about positioning your business for success in a sustainability-driven economy. Investors, customers, and employees are increasingly prioritizing ESG performance, making transparency and accountability critical to maintaining trust and competitiveness.

CSRD Compliance Checklist

To help your business navigate the complexities of CSRD compliance, we’ve broken down the process into a comprehensive checklist. Each step includes guidance to ensure you’re fully prepared.

1/ Assess Your Reporting Obligations

The first step in your CSRD journey is to determine whether your business falls under the directive’s scope [1]. The CSRD applies to:

• Grandes entreprises: Those meeting at least two of the following criteria—250+ employees, €40M+ turnover, or €20M+ in assets.

• Listed SMEs: Small and medium-sized enterprises listed on EU-regulated markets, with transitional provisions until 2026.

• Sociétés hors UE: Businesses generating €150M+ in annual EU turnover.

Actionable Guidance:

• Review your company’s size, structure, and operations to confirm eligibility.

• Consult the official CSRD guidelines or seek legal advice if you’re unsure about your obligations.

• Map out a timeline for compliance, keeping in mind that reporting for the 2024 financial year is due in 2025.

2/ Conduct a Double Materiality Assessment

A cornerstone of the CSRD is the concept of double materiality, which requires companies to assess:

• Impact Matérialité: How your business activities affect the environment and society (e.g., carbon emissions, labor practices).

• Matérialité financière: How sustainability issues (e.g., climate change, regulatory changes) impact your business financially.

Actionable Guidance:

• Engage with key stakeholders, including investors, employees, customers, and suppliers, to identify material ESG topics.

• Use a materiality matrix to prioritize issues based on their significance to your business and stakeholders.

• Document your findings and ensure they align with the ESRS framework.

3/ Build a Robust ESG Data Collection System

Accurate and reliable data is the foundation of CSRD compliance. You’ll need to collect, measure, and report on a wide range of ESG metrics, including:

• Environmental Data: Greenhouse gas emissions (Scope 1, 2, and 3), energy consumption, water usage, and waste management.

• Social Data: Employee diversity, turnover rates, training hours, and community engagement.

• Governance Data: Board composition, anti-corruption policies, and risk management practices.

Actionable Guidance:

• Identify the data sources and systems needed to track relevant metrics.

• Invest in ESG software solutions, such as Seneca’s AERA for GHG Manager, EPIC for Corporations.

• Establish clear protocols for data validation and quality assurance to ensure accuracy.

4/ Align with European Sustainability Reporting Standards (ESRS)

The ESRS provides the detailed framework for CSRD reporting, covering a wide range of sustainability topics. Key areas include:

• Environnement: Climate change, pollution, resource use, and biodiversity.

• Social: Workforce practices, human rights, and community impact.

• Gouvernance: Business ethics, risk management, and corporate governance.

Actionable Guidance:

• Download the latest ESRS guidelines from the European Financial Reporting Advisory Group (EFRAG) [2].

• Conduct a gap analysis to compare your current reporting practices with ESRS requirements.

• Develop a roadmap to address gaps and ensure full alignment with the standards.

5/ Integrate Sustainability into Your Business Strategy

CSRD compliance is not just about reporting—it’s about embedding sustainability into your core business strategy. This requires:

• Setting measurable ESG goals, such as achieving zéro net emissions or reducing water usage by a specific percentage.

• Developing initiatives to address material ESG issues, such as transitioning to renewable energy or improving supply chain transparency.

• Ensuring that sustainability considerations are integrated into decision-making processes at all levels of the organization.

Actionable Guidance:

• Establish a cross-functional sustainability task force to drive initiatives and monitor progress.

• Align your sustainability goals with broader business objectives to ensure buy-in from leadership and employees.

• Regularly review and update your strategy to reflect changing regulatory requirements and stakeholder expectations.

6/ Prepare for Independent Assurance

One of the most significant changes under the CSRD is the requirement for third-party assurance of sustainability reports. This ensures the accuracy, reliability, and credibility of your disclosures.

Actionable Guidance:

• Partner with a reputable auditing firm early in the process to avoid last-minute challenges.

• Ensure your data collection and reporting processes are audit-ready by maintaining detailed documentation and adhering to best practices.

• Conduct internal audits or pre-assurance reviews to identify and address potential issues before the formal assurance process.

7/ Communicate Transparently with Stakeholders

Your sustainability report is a powerful tool to build trust and showcase your commitment to sustainability. Effective communication requires:

• Using clear, concise language and visual aids (e.g., infographics, charts) to make complex data accessible.

• Highlighting key achievements, challenges, and future goals to provide a balanced view of your sustainability performance.

• Sharing the report through multiple channels, including your website, social media, and investor communications.

Actionable Guidance:

• Host a stakeholder webinar or town hall to present your report and gather feedback.

• Engage with stakeholders throughout the year to keep them informed about your sustainability journey.

• Use storytelling techniques to connect with your audience and demonstrate the impact of your initiatives.

FAQs About CSRD Compliance

1. When does CSRD take effect?
   On January 5, 2023, the Corporate Sustainability Reporting Directive (CSRD) officially came into effect. The new regulations will first apply to companies for the 2024 financial year, with their initial reports due to be published in 2025.
2. Does CSRD apply to non-EU companies?
   Yes, non-EU companies with significant EU operations (€150M+ in annual turnover) must comply.
3. What happens if I don’t comply?
   Non-compliance can result in fines, legal action, and reputational damage.
4. How can SMEs prepare for CSRD?
   Start by conducting a materiality assessment, improving data collection processes, and seeking guidance from ESG experts.

Références: 

[1] https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en 

[2] https://www.efrag.org/en/projects/esrs-implementation-guidance-documents